There are only a few weeks left until London votes for a successor to Boris Johnson, its mayor, on 5 May. The race is an important one. London is now the powerhouse of the British economy and its success is lifting the entire country. But there is a problem. There isn't a pro-business candidate in the contest, on either side of the political divide. That is a shame because as well as it is doing, London could do better still and that would lift the whole economy.
The significance of London's economy is growing all the time. If it was a separate country, it would be a major economy in its own right: on the latest Eurostat figures, it has a GDP of £321bn, more than Sweden or Poland. According to a recent study by the Brookings Institution, it is now the third fastest-growing city in the developed world, slightly behind Macau and Dubai. It is streets ahead of anywhere else in the US or Europe the Bulgarian capital city Sofia and Austin, Texas, are the closest on growth rates.
Measured on a purchasing power parity basis, it is the fifth-richest city in the world, trailing only Tokyo, New York, Los Angeles and Seoul, and expanding faster than all of them. It is no longer just a financial centre, although that is still important. It is increasingly Europe's Silicon Valley as well and it has strength in design, media and professional services all lucrative global industries.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
None of the candidates seem at all interested in that, however. The frontrunner is Labour's Sadiq Khan,who only looks like a moderate when compared to his party's leadership. Kahn is campaigning for more regulation of the rental market and a hugely expensive freeze on bus and rail fares. The Conservative candidate, Zac Goldsmith, has remarkably little to say about London's economy either.
He wants to clamp down on Uber in favour of state-regulated black cabs and is a fierce opponent of a third runway at Heathrow, when London desperately needs better connections to the rest of the world. If you can't fly into and out of London without circling around Richmond for an hour or two, people base themselves somewhere else.
None of the minor candidates are much better. The Lib Dems have fadedinto insignificance and the Greens want to close down the City airport to build houses and business units instead. The tragedy is that London's mayor could be doing a huge amount to make the capital even richer. Such as?
First, give London more control over its own tax and spending. If Scotland can have its own tax system, so can the far bigger London economy. Take just one example. A tourist tax, such as the one imposed in Paris or many other cities, might make a lot more sense for the capital than higher stamp duties on already cripplingly expensive property.
Secondly, why not demand a special policy so that London could pay public-sector workers more and make it affordable for them to live in the city? It is going to need world-class policemen, social workers, doctors, nurses and teachers, but it won't be able to keep them if they can have a far better quality of life elsewhere.
Finally, why not give the mayor control over London's own infrastructure planning and spending, with the ability to deploy a fraction of the tax revenue it generates. A new airport? Expanding into the green belt? These should be decisions for London, not the Westminster government.
If London was just allowed to keep the money raised from fining the banks that would pay for a new Tube line, or tens of thousand of affordable houses in the suburbs. A pro-business mayor could do a lot to strengthen the London economy. And that would be great for the whole British economy. It's just a shame there is no mayoral candidate up for the job.
-
SIPP holders to get cash warnings and be offered default fundsNews Providers will be required to offer investors a default fund and must warn customers of the inflationary risk of cash savings the regulator has said. What the new rules mean for your retirement pot?
-
Zoopla: Asking price discounts hit a five-year high – is now the time to buy a property?
News Zoopla’s October House Price Index shows sellers are accepting discounts of 5.5% on average to secure a sale – we reveal where homeowners are taking the biggest asking price cuts
